Category: Real Estate

How Local Schools Can Impact Your Home’s Value

Maui real estate
Schools are, of course, an influence on surrounding home prices. A good school district can increase buyer demand within its boundaries, which in turn increases home values. Homes located in high-scoring school districts attract more buyers, including parents who want their children to go to good schools and others who understand that a good school district helps protect a home’s resale value.

On the flip side, a struggling school district can experience less buyer demand, which restrains home values. In addition, a low-scoring public school can decrease the availability of amenities in the area and increase the proportion of renters to homeowners.

Home prices are generally not as impacted by nearby private schools, since attendance to private schools is not dependent on home location. That same theory can sometimes apply to public schools: Even if two elementary schools feed into the same high school, the more desirable elementary school could easily command higher home prices within its attendance boundary.

Prospective homebuyers should explore school districts’ websites and visit schools personally to meet with administrators when house-hunting with education in mind. They should also be aware of educational options offered by the district that are not dependent on property location, such as magnet programs and charter schools. For example, many lower-performing high schools and elementary schools receive additional financing and special support; the homes surrounding these schools may be priced lower than those in better districts nearby, yet still offer good educational opportunities.

Buyers can benefit by engaging a local REALTOR® for assistance. In addition to offering traditional services (facilitating showings, negotiating contracts, recommending lenders, following inspections, etc.), REALTORS® can serve as the expert “source of the source” when it comes to educating buyers about districts and schools. District and individual school websites are valuable resources, as are state departments of education. Even private publications and online entities uncovered by a simple Google search gather data and post reviews, and many offer rankings.

Source: Jeffrey Fagan, President for the Orlando Regional Realtor Association

Things To Do Before the Movers Arrive

Maui real estate
Working with professional movers is a great option for people making big moves, moving with kids, or moving large or fragile items that would be otherwise impossible to transport. But while many moving companies do a great job of providing end-to-end service, there are some things that only you can do to make the whole process run smoothly. Here’s our list of six surprising things you’ll need to do before the movers arrive in order to avoid disaster.

1. Make a clear path

Whether you live in an urban apartment or a two-story house in the country, there are bound to be obstacles for your movers. By anticipating these issues before they happen, you can make everyone’s job easier, and possibly even save some money by taking up less of the movers’ time.

First, you should consider the parking situation outside your home. Where will the movers be able to leave their truck when packing up your stuff? If you do have that house in the country, this might not be an issue. But if you’re living in an apartment or urban area, chances are good that a huge double-parked truck won’t be taken very kindly by the neighbors.

“If you live in an apartment building or if there is limited parking in your area, ask the movers if they will handle the logistics or if you need to do so,” says Ali Wenzke, author of “The Art of Happy Moving.”

Some moving companies might be familiar with your neighborhood and know how to park in a way that doesn’t raise any red flags with the neighbors. But if they tell you they’d like your help with the logistics, then this will be on you to handle before they arrive.

“You may need to contact your building manager,” Wenzke says, “or the local city government to get the appropriate signage and allowances.”

There are other things to consider, too—like the state of your driveway.

Pat Byrne, operations manager of Long Island–based moving company Moving Ahead Moving & Storage, always asks clients to remove ice and snow to avoid any accidents during the move. You should also make sure the driveway and front access points are clear of debris—like kids’ or pet toys that might pose a slip hazard.

2. Make necessary reservations and get your paperwork together

Some apartment buildings might have service elevators available for use. This would be another time-saving question to ask your building manager in advance.

“See if service elevators can be reserved and whether the building needs any paperwork from movers—like a certificate of insurance,” says Byrne.

3. Protect your house, including your floors

To prevent damage to your house during the move, you should be aware of what furniture is going out the door, and anything fragile in its path that might be at risk of breaking.

“Lightbulbs, fixtures, pictures, mirrors, wall hangings should be removed from the main areas where furniture will be moved,” Byrne says.

And don’t forget about the hardwood floors. Nothing will put off a buyer more than seeing skid marks illustrating the path your sofa took out of the place.

“If you have hardwood floors or tile in any rooms, let your movers know ahead of time so they can prepare the right materials—and make sure your contract includes hardwood floor protection,” advises Miranda Benson, marketing coordinator at San Francisco–based moving company Dolly.

4. Measure!

On a related note, you’ll want to measure your furniture and make sure any large items will fit through the front door in the first place.

“Nothing is more heartbreaking than finding out the gorgeous sectional you spent hours assembling is not going to make it through your front door unless you spend more hours disassembling it,” Benson says.

5. Pack up the kids (and pets)

Not literally, of course. But you should take the time to consider where your family will be when the movers are at work. If paying for a space in the nearby pet hotel isn’t an option, at least consider keeping your pets in a safe space within your home.

“Pets should be kept in a room with everything they need that movers won’t need to access,” Byrne advises. “You’d want to do this even if your pet is friendly, to avoid [their] accidentally getting out of the house or injured.”

Similarly, young kids should also be kept out of the way on moving day. This is important for their safety as well as the safety of your moving team.

“The last thing you or your movers want to worry about is whether your 2-year-old’s scream is going to shock them at the wrong time,” Benson says.

6. Make yourself available

Once the family is out of the house, it’s time (drumroll, please) to sit down and relax—sort of. Find a central point in your home (that’s out of the movers’ way) and simply plan on making yourself available to them as they move your stuff.

Do we mean supervising their every move and reminding them the box is marked “fragile”? Probably not. But you should be around to help answer any questions, or alert movers to anything special they should know about your place.

“There are little things about your house that you only learn from living there: The hallway closet door never stays closed, the third step down has a slight bend, a pack of hornets tends to congregate around the back door, so use the front—these are all valuable things that make your movers’ lives easier,” Benson explains.

“On top of that, being available to answer questions, whether that’s in person or via phone, can make your move much smoother,” she adds.

This post appeared first on realtor.com®.

Reasons to Buy a Home Now

Maui real estate
Whether you are a first-time buyer or looking to move up to the home of your dreams, now is a great time to purchase a home in Maui. Here are three major reasons to buy today.

1. Affordability

Many people focus solely on price when talking about home affordability. Since home prices have appreciated throughout the past year, they assume homes are less affordable. However, affordability is determined by three components:

  • Price
  • Wages
  • Mortgage Interest Rate

Prices are up, but so are wages – and interest rates have recently dropped dramatically (see #2 below). As a result, the National Association of Realtors’ (NAR) latest Affordability Index report revealed that homes are MORE affordable throughout the country today than they were a year ago. “All four regions saw an increase in affordability from a year ago. The South had the biggest gain in affordability of 6.9%, followed by the West with a gain of 6.0%. The Midwest had an increase of 5.8%, followed by the Northeast with the smallest gain of 1.8%.”

2. Mortgage Interest Rates

Mortgage rates have dropped almost a full point after heading toward 5% last fall and early winter. Currently, they are below 4%. Additionally, Fannie Mae recently predicted the average rate for a 30-year fixed mortgage will be 3.7% in the second half of 2019. That compares to a 4.4% average rate in the first quarter and 4% in the second quarter.

With mortgage rates remaining near historic lows, Fannie Mae and others have increased their forecasts for housing appreciation for the rest of the year. If home price gains are about to re-accelerate, buying now rather than later makes financial sense.

3. Increase Family Wealth

Homeownership has always been recognized as a sensational way to build long-term family wealth. A new report by ATTOM Data Solutions reveals: “U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since purchase of $67,500, up from an average gain of $57,706 in Q1 2019 and up from an average gain of $60,100 in Q2 2018. The average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of original purchase price.”

The longer you delay purchasing a home, the longer you are waiting to put the power of home equity to work for you.

With affordability increasing, mortgage rates decreasing, and home values about to re-accelerate, it may be time to talk with a real estate professional in Maui to determine if buying now makes sense for your family.

Americans Feel Great About Real Estate

Maui real estate
Fannie Mae’s Home Purchase Sentiment Index surged to a new high as consumers became more upbeat about buying and selling, mortgage rates, and their jobs. Five of the six components measured by the index rose month over month.

“Consumer job confidence and favorable mortgage rate expectations lifted the HPSI to a new survey high in July, despite ongoing housing supply and affordability challenges,” says Doug Duncan, Fannie Mae’s senior vice president and chief economist. “Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category. However, recent financial market events following when the survey data were collected could weigh on consumer views looking ahead.”

Overall, the HPSI, based on a survey of 1,000 Americans, rose 7.2 points compared to a year ago to a record-high reading of 93.7 in July. Here are some highlights from the index’s latest readings:

  • Buying: The net share of Americans who said now is a good time to buy a home rose 3 percentage points from June to 26%, up 2 percentage points from a year ago.
  • Selling: The net share of consumers who say it’s a good time to sell rose 1 percentage point to 44%, up 3 percentage points from a year ago.
  • Home prices: The share of Americans who say home prices will go up over the next 12 months fell 1 percentage point to 37%, down 2 percentage points from a year ago.
  • Mortgage rates: The share of consumers who believe mortgage rates will drop over the next year rose 1 percentage point and is up 24 percentage points from a year ago.
  • Job stability: Americans are more confident about their job situation, with the share who say they’re not concerned about losing their job over the next year rising 8 percentage points to 81%. This is up 16 percentage points from a year ago.
  • Household incomes: The share of Americans who say their household income is significantly higher than 12 months ago rose by 1 percentage point to 21%, essentially unchanged from a year ago.

Source: “Home Purchase Sentiment Index,” Fannie Mae (Aug. 7, 2019)

Reasons You Should Not FSBO

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Rising home prices coupled with a lack of inventory in today’s market may cause some homeowners to consider selling their home on their own (known in the industry as a For Sale By Owner). However, a FSBO might not be a good idea for the vast majority of sellers.

Online Strategy

Recent studies have shown that 95% of buyers search online for a home. In comparison, only 13% use print newspaper ads. Most real estate agents have an Internet strategy to promote the sale of your home. Do you?

Internet Results

Where did buyers find the home they actually purchased?

  • 50% on the Internet
  • 28% from a Real Estate Agent
  • 7% from a yard sign
  • 1% from newspapers

The days of selling your house by putting up a sign and listing it in the paper are long gone. Having a strong Internet strategy is crucial.

Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent, who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser, if there is a question of value

FSBOing Has Become Difficult

The paperwork involved in the process has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 7% over the last 20+ years.

You Net More Money

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, they may actually cost themselves more. One of the main reasons for the price difference at the time of sale is:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The more buyers that view a home, the greater the chance of a bidding war for the property. The study found the difference in price between comparable homes of size and location is currently at an average of 6%.

Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent without additional cost?

Before you decide to take on the challenge of selling your house on your own, sit down with a real estate professional in your marketplace to discuss your needs.

Escrow 101 for Maui Home Buyers

Maui escrow
When you buy a house in Maui, you basically have to learn a whole new language. Between figuring things out with your mortgage lender and navigating the results of the home inspection, you’re probably googling words left and right. It’s important to protect yourself during this major transaction. And that’s why one of the words you might have to look up — escrow — is key.

What is escrow? You’ve probably heard of people getting stuck in escrow, so you might feel less than excited about the topic. But fear not! Escrow is actually super easy to understand and great for both the buyer and the seller.

What is escrow?

Let’s say Johnny wants to buy an apple from Susie. But Johnny and Susie don’t really know each other and want to make sure they both get what they expect from the deal. So they pick an impartial person off the playground. Let’s call him Timmy.

Now, to make sure everything goes down the way it should, Susie hands her apple to Timmy. Johnny gives Timmy his money. And then, and only then, Timmy gives Susie the money and Johnny the apple. In this case, Timmy is escrow. Escrow is an arrangement where you use an impartial third party to protect yourself during a transaction.

Now let’s apply it to real estate. The stakes are a little bit higher than apples, so it makes sense to take some precautions. In a real estate transaction, escrow is where the money the buyer plans to pay the seller is held until all the specifications of the deal can be worked out and the deed can be transferred.

There are escrow companies who are experts at keeping money safe and disbursing it at the exact right moment. There are even escrow officers who will help with the entire process. So escrow, while it might get a bad rap because people get tied up in it, is actually a very helpful part of the real estate process.

Escrow and earnest money

If you’re a home buyer in Maui, you’re probably taking the process seriously. This is where you’re going to live the next season of your life, after all! You’ve spent the time to vet the new house and you’re pretty serious about buying it. Some might even say you’re earnest. So you offer the seller a little bit of money called earnest money to show them you’re serious about buying their home.

But here’s the thing. You don’t really know this seller. Sure, they might seem nice. And, yes, you like their home. But they could be shady. It’s not a judgment. You simply don’t have a way to get to know them well enough to feel good writing them a check for thousands of dollars when they’re not giving you anything in return — yet.

So you don’t make your earnest money out to the seller directly. Instead, you put it into escrow. And it lives safely there until it’s either applied to the purchase price of the home at closing or returned to you if the deal falls through for a number of reasons.

Escrow and closing

You’ve worked out all the kinks in your transaction. Everyone’s happy with the inspection. Everyone’s agreed on a move out date. You’re ready to get this thing finished so you can either move into your new home or get a check from your buyers. And this is where escrow really shines.

We’re talking about a lot of money here. Houses aren’t cheap! Using escrow protects everyone involved while this large sum of money changes hands. Before closing, the buyer will put the purchase price amount into escrow. It will sit safely there while the final paperwork is completed and the deed is recorded. Then, and only then, will the escrow company pay that amount to the seller.

You hear about people getting tied up in escrow because closing isn’t always smooth sailing. Last minute issues arise and these can be frustrating for all parties involved. But, even then, you’ll be glad you’ve arranged escrow. Why? Escrow protects the buyer because it ensures the seller doesn’t run off with their money, house deed still in hand. At the same time, it protects the seller from handing over their deed in exchange for a check that won’t clear.

Tips For Knowing When to Upsize or Downsize

Maui real estate
Are you considering moving to a new Maui home? Perhaps you think a change will make everyone happier, and help you keep up with the cost and upkeep of homeownership.

Right-sizing is a common term used to describe the process of choosing a home to fit your current needs. Here are four ways to tell that it’s time to make the switch and look into purchasing a home that’s better suited to your current situation.

Too Much to Clean

No one wants to spend a ton of free time scrubbing, sweeping, mopping and caring for a home. Consider how and where you’re comfortable at home. Many people spend most of their time in a few key spaces like the bedroom and kitchen. If you’re spending more time cleaning than living, you either don’t have enough people cleaning—or you have too much space for the amount of living you do.

Too Much or Not Enough lawn

The yard is one part of a property that many people don’t have time to care for consistently. Other people love spending an hour or so in the garden each day or sipping a cup of coffee while the sun is coming up. Finding the right space to let you entertain, relax after a hard day, or give the kids room to safely burn off some energy is important. Considering low-maintenance options and how often the family uses the outdoor space can help you decide if now is the time to buy a different Maui home.

Not Enough Room

When you have several young children, space is always an issue. When the kids grow up, things change—including the size of the home needed. Sellers can help prospective buyers find a property that’s perfect for their current needs. Whether you’re adding members, or the family dynamic is shifting so there are fewer people in the home, the size of the house is a big deal.

Kitchen Space

No one likes crowding into a tight space for dinners or special occasions like birthday parties and graduation celebrations. It’s also tough to sit in a huge kitchen by yourself thinking about how much cleaning is necessary or the additional cost to remodel a huge space when there are only two or three people in the home. Right-sizing can help you discover the best property for your household after big changes like an elderly parent moving in, the kids going off to college, or several grandchildren coming along.

Thinking about recent life changes can help homeowners decide when it’s time to make a move. Keeping your finances, life plans and schedule on track isn’t always easy when you’re living in a home that’s too small or big for your present needs. As families evolve, mortgage fees, maintenance costs and time to care for the property become even more important.

Explaining Real Estate Commission

Maui real estate
If you hire a real estate agent to help you buy, sell, or rent a house in Maui, this professional gets paid through a real estate commission. So how much do you pay, and what for? Is there any wiggle room to negotiate this fee?

How much is a real estate commission?

Rather than getting paid hourly or weekly fees, most real estate agents earn money only when a real estate deal goes through.

While there are some real estate agents in Maui who will charge a flat fee for their services, most charge a percentage of the sales price of the home once the deal is done. That exact percentage varies, but the commission is typically 5% to 6% of a home’s final sales price. On a $200,000 home, a 6% commission would amount to $12,000.

Granted, this may seem like a serious chunk of change, but keep in mind that no one makes off with the whole amount! Plus, real estate agents don’t see a dime until a buyer finds a home she loves, the seller accepts the offer, and all parties meet at the closing table. That process can mean weeks or months of work.

Who pays the commission?

Generally, the home seller pays the full commission for the services of both their own listing agent and the buyer’s agent.

Buyer’s and seller’s agents typically split the commission. So if a home sells for $200,000 at a 6% commission, the seller’s agent and buyer’s agent might split that $12,000, and each receive $6,000.

However, the commission split varies from one agent to another, with new agents sometimes earning a smaller percentage of the commission than experienced agents who sell more homes or more expensive properties.

What is dual agency?

So what happens if an agent represents the buyer and the seller? In that case, the agent becomes a “dual agent” and gets paid both commissions.

However, because it puts them in a sticky position of having to work for both the seller and the buyer, many agents don’t practice dual agency.

What does a real estate agent commission cover?

Though people certainly have the option of selling (or buying) their house without a real estate agent, agents provide clients a wide range of services, including helping you price your home, marketing it (on the multiple listing service, social media, and other venues), negotiating with home buyers, and ushering the home sale through closing.

As trained experts, real estate agents can help you fetch top dollar for your Maui house and put out fires—while also alleviating some of the stress that comes with selling a home.

Want proof? Just look at the numbers: A recent survey found that the typical “for sale by owner” home sold for $190,000, compared with $249,000 for agent-assisted home sales, according to the National Association of Realtors®. That’s in line with a recent survey from Keeping Current Matters that found that homes listed for sale with a real estate agent sell for $46,000 more on average than FSBO houses. Perhaps that explains why 92% of home sellers use an agent to sell their house.

Is a real estate agent commission negotiable?

Though 5% to 6% tends to be the norm, commission standards can vary from state to state and among brokerages. Still, there are no federal or state laws that set commission rates—meaning commission is negotiable.

In other words, if you’re a home seller, you can certainly ask your agent to reduce their commission, but be aware that he is not obligated to do so.

A factor to consider: Because the marketing dollars for a property generally come from the agent’s commission, a lower commission could mean less advertising for your house.

That being said, it doesn’t hurt to ask for a lower commission. Most agents won’t take offense, and the worst case is they say no. Or, if you’re truly tight on cash—say, because you’ve maxed out your budget buying your next home—you could opt for a transactional agreement, in which the listing agent will help you set an asking price, facilitate communication between you and the buyer, write the contract, and move the process along to closing for a flat fee or lower commission, but you won’t receive the agent’s full services. It’s not ideal, but it’s the right route for some people. However, not all agents offer transactional agreements, so you may have to shop around to find one.

Bottom line: It is likely that buying and selling a home will be the biggest financial transactions of your life, so be sure you find an agent that you trust will do a great job. This is not the time to shop solely on price.

Things to Look for When Buying a New House

Maui homes
Shopping for a new house in Maui means doing a little digging to see if any big repairs or deal breakers are lurking beneath the surface. It’s likely a few issues will come up during your inspection, but it’s smart to check these things out before you put in an offer.

Damaged roof

The first thing you need to know about your potential new home is the age and condition of the roof. Do a visual check of the roof by walking around the house. Look for damaged or missing shingles, rusted flashing, moss or dirt and any other spots that worry you. A damaged roof could seriously impact the interior and exterior of your home.

Heating and cooling performance

Few things are worse than needing A/C or heat, and not having it. So make sure you check the heating and cooling system to see if it’s in good working order. Ask the age of the system, turn it on and off, take a look at the ductwork if possible and see if the filters fit snugly. Don’t forget to look outside, too. Listen to how the air conditioning and heating units sound when they’re running. Look for rust and dirt on the equipment.

Water damage

Inside the house, look for water stains on the ceiling. Check under sinks in the kitchen and bathrooms and test all of the faucets and showers. You’ll also want to check out the basement, garage or crawl space to see if there’s a sump pump. These could all indicate past or future problems with poor water drainage which could lead to flooding. Outside, look for sloping areas in the yard, standing water, french drains, water marks on the foundation. Even if the water issues aren’t active anymore, it’s good to know past problems and what could pop up in the future.

Foundation faults

If you’re serious about buying a house, be sure to check out the foundation. Walk around the exterior, go into the crawlspace or basement and look for cracks and other red flags.

Working appliances and electrical outlets

Don’t let cosmetic repairs distract you from potential problems. Look at all appliances to make sure they’re in good shape. Turn on the stove, run the dishwasher and peek into the refrigerator. Look for grounded GFCI outlets in your kitchen and baths — the ones with the red and black reset buttons. Also, give the circuit breaker a look and flip a few of the breakers. If this is going to be your new home, you want to make sure everything works as it should.

Working windows

It’s a simple thing, but check all the windows in the new house to make sure they open properly. This is important for fire safety, as well as for comfort on a warm day.

Bugs and pests

You may not see any critters during the day, but look in corners and cabinets for mouse and roach droppings. Again, this is another easy fix. You can ask the homeowner for a pest control treatment as part of your contract.

The 10 Most Profitable Markets for Vacation Homes

Maui real estate
A house right on the beach, maybe a cabin in the woods surrounded by the magnificent fall foliage, or perhaps a rustic lodge in the mountains near the ski slopes. Whatever your dream vacation home happens to be, what if it turned into your best investment as well?

Not only do many second-home markets have solid returns, some even post profits that rival or surpass those in the nation’s hottest markets. Plus, some of these vacation spots are surprisingly affordable, with plenty of bargains to be had. Realtor.com ranked the most lucrative second-home markets in the nation, the places where sellers are walking away with biggest profits.

To find the country’s most profitable vacation-home markets, they looked at the 500 largest metropolitan areas where second homes made up at least 12% of all of the properties. Then they focused on all of the homes that sold over the past 12 months and compared the most recent sale prices to their previous ones, going back as far as 2008. The profit was defined as the difference between the two sales.

1. Traverse City, MI

Annualized rate of return: 14%
Median home list price: $315,000

2. Claremont, NH

Annualized rate of return: 12%
Median home list price: $255,000

3. Clearlake, CA

Annualized rate of return: 11%
Median home list price: $325,100

4. Brainerd, MN

Annualized rate of return: 11%
Median home list price: $286,200

5. Port St. Lucie, FL

Annualized rate of return: 11%
Median home list price: $279,300

6. Bend, OR

Annualized rate of return: 11%
Median home list price: $442,000

7. Aberdeen, WA

Annualized rate of return: 10%
Median home list price: $229,500

8. Wenatchee, WA

Annualized rate of return: 10%
Median home list price: $449,100

9. Hilo, HI

Annualized rate of return: 10%
Median home list price: $494,100

10. Key West, FL

Annualized rate of return: 9%
Median home list price: $687,100